When four young Canadians took the Canada Pension Plan Investment Board (CPPIB) to court in October, the pension manager responded by calling the legal challenge “an action against the retirement security of 22 million Canadians.” This response deflects from an obvious truth: climate stability is a prerequisite for the financial sustainability of the Canada Pension Plan.
The four plaintiffs allege that the CPPIB has breached its duties by mismanaging climate-related financial risks. Their case argues that the pension manager is dramatically underestimating its exposure to the financial risks of a warming planet. In its 2025 annual report, the investment board estimates only a 4% loss in a “hot-house world” scenario where temperatures rise by 3°C. But scientists warn that such a trajectory would bring devastating impacts to global economies, financial systems and human livelihoods. No portfolio could withstand the impacts of that much warming. Yet CPPIB has continued to commit billions to the cause of the crisis: fossil fuel expansion.
“Our case is alleging that CPP Investments is mismanaging our pension fund by failing to adequately respond to climate change,” explains Rav Singh, one of the young applicants. “CPP is supposed to be one of our most reliable sources of retirement income. We should all be concerned that our CPP benefits may not be as dependable as we’d like to think.”
This case is among the first of its kind, where beneficiaries are asking the courts to hold their pension manager accountable for mismanaging climate risks. The applicants are not seeking money; they are asking the court to direct CPPIB to identify, assess and manage climate risks appropriately and transparently, in line with its mandate to invest without “undue risk of loss” and act in the best interests of contributors and beneficiaries.
CPPIB has acknowledged that climate change is “an existential threat . . . the single biggest investment risk that we face.” In March 2025, CPPIB published an interview with climate scientist Johan Rockström, who warned, “We cannot continue allowing ourselves to destroy the stability of the climate system, and quite frankly the stability of the planet, by subsidizing unsustainable investments.”
Despite recognizing the threat, CPPIB’s climate approach tells another story. Its risk modelling assumes CPP resilience at more than 3°C of warming. According to the Intergovernmental Panel on Climate Change, 3°C of global warming could expose 3.25 billion people to lethal heat and humidity, decimate fresh water supplies and global food production, cause the extinction of plants and animals, lead to the collapse of marine ecosystems, and trigger catastrophic sea-level rise. It is imprudent to suggest that CPPIB can fulfill its mandate – or that Canadians can enjoy retirement security – under such catastrophic climate outcomes.
Meanwhile, last year CPPIB abandoned its net-zero commitment, reversing its 2022 statement that stewarding the portfolio to net-zero emissions was in “the best interests of the contributors and beneficiaries of the Canada Pension Plan.” The net-zero reversal was approved by a board on which nearly one-third of CPPIB directors held roles with fossil fuel companies, raising questions about potential conflicts of interest.
In the months following that reversal, CPPIB doubled down on fossil fuels: investing $4.1 billion in Sempra Infrastructure, which builds new gas pipelines and export terminals, and $1.4 billion in AlphaGen, owner of 23 fossil fuel power plants. These are not “transition” investments – they are bets on the continued expansion of fossil fuels.
When journalists asked CPPIB to explain how this climate litigation could be “an action against 22 million Canadians’ retirement security,” as articulated in its approach to climate risk, the fund didn’t respond. As applicant Aliya Hirji said, “I don’t want to be suing my pension. But I want to retire on a stable pension into a livable future. If taking CPP Investments to court is what’s needed to achieve that, so be it.”
The reality is that many of CPPIB’s peers are already showing what responsible, climate-aligned investing looks like. ABP, Europe’s largest pension fund, affirms that “Building good pensions together in a liveable world [is] our mission . . . A liveable world demands a sustainable economy.” La Caisse, which manages the Quebec Pension Plan, has exited coal and oil entirely and tied staff compensation to climate goals – actions it says have improved the fund’s financial position. And Ontario’s University Pension Plan directly links its fiduciary duty to climate responsibility, stating that “Climate change stands out among the significant material risks to our portfolio, demanding immediate action in line with our fiduciary responsibility.”
CPPIB is one of the world’s largest and most sophisticated investors. It has the tools, talent and resources to manage climate risk responsibly – but it must choose to actually do so. Protecting the CPP means protecting the climate that Canadians will retire into. Climate stability and pension sustainability are not opposing goals. They are inseparable.
Cheryl Randall is the campaign specialist and Patrick DeRochie is the senior manager for Shift Action for Pension Wealth and Planet Health, a charitable project that tracks the fossil fuel investments and climate policies of Canadian pension funds, and mobilizes beneficiaries to engage their pension managers on the climate crisis.
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